tv The Profit CNBC October 20, 2014 10:00pm-11:01pm EDT
get second chances. so i'm grateful for that, and i just think it's gonna be a great deal. ♪ courage. bis: is a family-run clothing company with seven stores across the country, but they have stumbled badly over the past two years. lousy decisions... noemi: i never approved this design. -nicolas: you approved this. -stephanie: are you kidding? lemonis: ...and poor execution... i just see cash. ...have put the company in a deep financial hole. that's created a ton of family drama. nicolas: you want all of the accolade without doing any of the work. lemonis: if they can't figure out a way to iron out their differences, there won't be a business to fight over. stephanie: nicolas, i don't want him to walk out that door because of this. lemonis: my name is marcus lemonis, and i fix failing businesses.
i make the tough decisions. i back them up, spending my own money. nicolas: whoa, whoa, whoa, whoa. stephanie: where did you learn to negotiate? nicolas: it's just gonna be thrown inside boxes. lemonis: it's not always pretty, but this is business. i do it to save jobs, and i do it to make money. this is "the profit." greenwich, connecticut, is one of the wealthiest towns in the country. its shops cater to a fashionable clientele. noemi: wow, look at that. lemonis: the goureau family opened courage. b in 2008 and have been designing and retailing upscale clothing ever since. noemi: voilà. lemonis: noemi has been the chief designer behind courage. b. noemi: look all the detail inside. this is what i love. you understand that? lemonis: her son, nicolas, oversees the operations. nicolas: did you make the labels for these yet? lemonis: while her daughter, stephanie, manages the finances and just as often plays the role of referee. [ both shouting in french ]
stephanie: stop. stop, stop. stop, stop. lemonis: despite generating $5 million in annual sales, courage. b is losing $500,000 per year. -stephanie: we're losing money. -nicolas: calm down. lemonis: and with the losses mounting, so is the tension. noemi: when i wear this color, i don't need makeup. nicolas: you know what colors i care about? red and green. and i'm trying to get this company back in the green. lemonis: if i can't figure out a way to break through all the family conflict... noemi: no, no, no, no, no, no, no. miss stephanie? lemonis: ...courage. b will completely unravel at the seams. when i arrive at the greenwich store, the first thing i see is a handwritten 60% off sign -- not the greatest first impression. i can't believe what i'm seeing. i feel like i'm in absolute chaos. feels like a flea market. i see pants randomly plopped on a table. i see a crowded jewelry display. i see things on sale everywhere. and i see soap for sale?
there's so much product jammed on the racks that it's hard to focus on a single piece of anything. do you shop here? woman: no, no. i have a store right around the corner. it's actually my first time in. lemonis: she owns a business in this neighborhood and she's never been in this store? well, that really tells me something. what's your first impression? woman: feels a little too busy for what's going on. can you pick out one thing you would buy? woman: um... i probably would have walked out. [ chuckles ] lemonis: really? -woman: yeah. -lemonis: okay. that's great feedback. thank you very much. woman: thank you. nice to meet you. lemonis: have a great day. -how you doing? i'm marcus. -noemi: ah. lemonis: how are you? nice to meet you. you're french, so you kiss? -noemi: yep. -lemonis: okay. how many years have you been doing this? noemi: i decide to don't talk more than 20. i think i born with this talent. i understand woman. a woman my age, you know? she's 35, you know. -lemonis: she's 35. -noemi: [ laughs ]
lemonis: that was good. stephanie: hi. noemi: voilà. this is my babies. lemonis: how are you? i'm marcus. your name? stephanie: stephanie. lemonis: stephanie, nice to meet you. nicolas: hi. nicolas goureau. lemonis: nicolas, nice to meet you. marcus. and so you deal with the operations. nicolas: i deal with the overall management of the entire business, stephanie finances, and my mother the product. lemonis: everybody's got a role. nicolas: they're my captains, you know, if you want to call it that. lemonis: and you're the general. how many stores do you have? nicolas: so, currently, courage. b has seven retail locations. lemonis: and the business will do how much in sales this year? stephanie: we are shooting to do $6 million. -lemonis: last year, how much? -nicolas: $5 million. lemonis: and so there's some substance to that number. and how about margins? nicolas: 50%. lemonis: okay. stephanie: last year, we lost. nicolas: we lost a lot of money last year. -lemonis: how much? -stephanie: a half million. lemonis: okay. industry average of margin on clothing is about 70%. in 2013, courage. b had margins of 50%. they do over $5 million a year in sales.
if we can just get courage. b's margins to increase by 20%, that's $1 million in gross profit. courage. b would go fromloss of $500,000 to a profit of $500,000. all of the seven locations are cash-flow positive? -nicolas: correct. -stephanie: no. nicolas: we did the numbers yesterday, stephanie. stephanie: fopp's is losing money. nicolas, that's -- it's losing money. nicolas: okay. lemonis: what did the "fopp" stand for? stephanie: a fopp is a very elegantly dressed woman. -nicolas: yeah. -lemonis: a minute ago, i thought that courage. b had seven locations. now i'm finding out that one of the locations isn't even callcourage. b. this business is looking more scattered by the minute. nicolas: there was a store that had been around for 20-plus years, which was my mother's store. and through poor business management, if you want to call it that... ...the business was starting to go into debt. she called me. she's like, "i just want to design." and i said, "fine. i can build the business." so, i started courage. b. lemonis: i'm finally starting to understand the goureau family business. noemi has actually owned an apparel store in manhattan
for decades. courage. b started in 2008 when noemi decided to step back from management and just focus on design. well, i want to get more of a tour. can you kind of give me a tour of the rest of the place and -- -nicolas: may i? -lemonis: yeah. nicolas: we built this store fully finished. lemonis: mm-hmm, and when you open a new store, who does the merchandising? stephanie: the merchandising is done by the employees in the stores but run by the managers themselves. lemonis: look, i have hundreds of businesses all over the country, and even my best manager cannot be left to do the merchandising. if you're gonna be a national brand, you have to have a national look and feel. i want customers to be able to travel the country and land at any of our locations and have the exact same experience. that's what a brand is about. i'm fascinated by how all this stuff gets from someone's head and how does it land finally on the shelf? nicolas: so, i'll walk you through, for example, our handbags. finest craftsmanship. you can probably jt see the way that they are.
the, um... okay. lemonis: but who came up with the design? nicolas: okay, so for example, this bag right here -- lemonis: just answer that. nicolas: noemi came up with the design for this bag. we mainly -- stephanie, myself, will come up with what connects to the rest of the merchandise that we're producing for that season. stephanie: noemi is the one who is constantly looking out in the world at what the trends are. but for the last five years, noemi has, you know, made a lot of designs and brought a lot of things in. many times -- not all -- things have come in that we've taken hits on. nicolas: right. lemonis: where's all this bad inventory? is there storage, stock room? nicolas: we have a storage room downstairs. lemonis: can i see what you have here? -nicolas: let's go. -stephanie: yeah. nicolas: so, the inventory that we have down here -- this is what didn't make it. lemonis: and so, because i'm not in your business, i just see cash. -stephanie: yes. -lemonis: that's what i see. who designed, like, these two things right here?
-stephanie: noemi did. -nicolas: noemi did. noemi: it's funny. you pick two things. it's, like, popping out. it doesn't belong in this pile. nicolas: well, we could probably pick 100 things like that. noemi: we liquidate that. nicolas: it doesn't matter if we liquidate. don't try and justify it. it wasn't correct. lemonis: and you know what's even more amazing to me? you're doing $5 million with this product. can you imagine what you would do if your product was right? and so what is the problem? how did it happen? nicolas: obviously, it's a family business, so the problem is that noemi's work wasn't up to par, and -- noemi: i had a very bad year. nicolas: noemi's work wasn't up to par. we were still depending on that product, and we ate it. lemonis: how much do you think it's cost? nicolas: almost a quarter of a million dollars. lemonis: and who signed off on them to be designed? nicolas: nobody checked. lemonis: the fact that they've lost $250,000 is alarming, but what's more alarming is the reason they lost it. you have one person designing it, and nobody is check and balancing that process. anything else i should know about what's down here? golf clubs, luggage? nicolas: no, those are my dad's golf clubs. lemonis: is your dad still around? nicolas: no, he passed away. my mom raised us by herself.
lemonis: 'cause i didn't know all of that. stephanie: in '87, they opened fopp's. my father and her opened a small boutique on lexington, and six months later -- noemi: he got sick. stephanie: ...he got sick with cancer and died. noemi: the year after, he died. very young man. stephanie: 38 years old. noemi: and he left me with stephanie, was 4, and nicolas was 7. stephanie: she got remarried. nicolas: two years ago, he divorced her. because he was married to her, and he started suing us, and... stephanie: the little bit she had left, she put into this business. noemi: it's why when we talked about the design, also, it was a part of that. stephanie: she checked out a little. nicolas: it was just bad. lemonis: for everybody. you could not have built this business without her. -period. -nicolas: period. lemonis: you know, it seems like this business really thrives when noemi's at the top of her game. when she's engaged, things are really good. the real courage to start the business came from you putting all your poker chips on the table.
by the way, that's the courage. but i don't give you credit for whatever this is. all right. nicolas: let's move along. lemonis: now i'm going to visit fopp's, the family's first location in manhattan, and it also happens to be the biggest financial drain. they should have called it "flops." stephanie: these are the pants we just sold if you want to just replace that. lemonis: so, tell me about this location. noemi: okay, this is the first location we opened in new york and my first store. lemonis: this store suffers from the same issues as the one in greenwich -- no thought process, no merchandising, product all over the place, crammed into every crack and corner you can find. i couldn't imagine a 30-year-old coming here and buying this stuff. what's a good sales day here numbers-wise? raquel: would be like about $1,500 a day. noemi: but not enough for the rent we pay. lemonis: $10,000? $12,000? noemi: no. you must be joking. stephanie: [ chuckles ] noemi: we're talking about almost $30,000. -lemonis: how much? -noemi: almost $30,000 a month.
$28,000 a month, yes. -lemonis: $28,000 a month? -nicolas: yeah. lemonis: if their average daily revenue is about $1,500, that means on a monthly basis, they're doing about $45,000. let's assume that their margins are 50%. their rent is $28,000 a month. before you pay any bill of any kind, including labor, they're already cash-flow negative. no wonder they got a problem here. how do you make that work? nicolas: well, we're eating up profits from the other locations. the lease has about another year and a half left on it. this is the only manhattan location? nicolas: this is the only manhattan location, yes. lemonis: after visiting two courage. b locations, the picture is much clearer on how this company got in trouble. even though they were smart enough to pick excellent retail locations, bad merchandising and design inconsistencies is why this company is all over the place. now i need to meet the family at their corporate offices and dig into the financials. well, this looks a lot different than the store.
-nicolas: yeah. -stephanie: yes. -lemonis: looks nice. -nicolas: thank you. so, this is home base, if you want to call it. lemonis: yeah. nicolas: this is our conference room/showroom. lemonis: i like it. i walk into their corporate office, and i'm surprised how different it is than the two retail stores i've been to. it looks like an edited collection of what courage. b actually stands for. it's much cleaner, and it's much clearer. stephanie: this product is our best-selling product. it is just an easy hanging cardigan, in essence, that we call the duster, 'cause it literally kind of dusts the floor. -lemonis: who designed it? -nicolas: mom did. lemonis: retail price on that? -nicolas: $99. -lemonis: cost? nicolas: $11. lemonis: look, there's very few businesses in the world where the margins are as explosive as they are as the clothing industry. fashion is a feeling. the better they feel, the more they'll pay. if you can take a product for $11 and sell it for $99 -- a 900% markup -- those are amazing margins. you're not gonna find that in very many industries,
and that's why i think there's a great opportunity here. i like it, but i'm gonna tell you something you're not gonna like. i think that the fit and finish, 'cause i looked at it on her, could use a little tweaking. noemi: exactly. nicolas: right here is the aspen bag in all the various different colors. lemonis: that's almost like a signature design. this is a good product. did somebody bring you this design? -noemi: no, this is me. -lemonis: well, i'm noticing that noemi has a keen sense of fashion. but while noemi's talent tells me this company has a real shot at success, these financials are telling me a very different story. the loss on this statement shows $500,000, which is what you told me. -stephanie: exactly. -lemonis: okay. professional fees of $250,000. stephanie: we went through a tough lawsuit last year. lemonis: was it the divorce? stephanie: yes. lemonis: ah. so, this is not a recurring... stephanie: no. no. this does not happen normally. lemonis: so, if i look at the financials for last year,
i take out the lawsuit, which means i still lost $250,000 for the year. we have about $900,000 of inventory. how much of that would you say is wrong? stephanie: right now we're stuck with about $400,000. lemonis: you have cash tied up in inventory that isn't right for your business. i understand that they lost $500,000 last year -- $250,000 from a lawsuit and $250,000 of bad inventory. but that's not the real problem. the real problem is the company doesn't have the right product on the ground, and if i can fix the product going forward and then merchandise it in a creative way, i know i can make money immediately. you're at a very weird place. this has the makings of being something great, but the business needs money, and all i have to get my head around is we're talking about changing the product and changing the process, and it's extreme, and putting money in at the same time. i'm gonna study these a little bit more. thank you. -stephanie: thank you very much. -lemonis: yep.
stephanie: [ sighs ] lemonis: well, you know, i've spent the last couple days asking you guys a lot of questions. while i struggle a lot with the product, you guys have spent a lot of time working really hard, but the business is really in trouble. i mean, you do $5 million of sales. but at the end of the day, last year, you lost money. stephanie: how do you envision the growth of this business? lemonis: it's about changing every single product that you have. you have $900,000 tied up in inventory. half of it should go into the garbage. how long can you survive? nicolas: we're trying to be as lean as possible. i have about three months where i won't be able to pay my rent at home. lemonis: how much money do you think this business needs? nicolas: i believe it needs around $1 million.
it's 20% of what we do on an annual basis. lemonis: well, it's 20% of what you sell. my offer is $800,000. i have full control. there's 100% of the stock today. -i'll have 50% of it. -noemi: [ gasps ] stephanie: whoa, whoa, whoa. nicolas: whoa, whoa, whoa. stephanie: we away off. nicolas: at this point, it's gonna be 50% for you and 50% for me. lemonis: i'm at 50%. nicolas: marcus. lemonis: and before you answer, just know that if you don't do a deal with me, you may not make it. nicolas: no. you want all of the accolade without doing any of the work. stephanie: nicolas. i don't want him to walk out that door because of this.
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at 10%, i'll give you a half-a-million-dollar loan and take the stock of the company as collateral. i mean, if you default, i'll take the business. so, you don't want that option. the option that you want is you want me to be just as excited as you are. nicolas: is it just because you want 50%? lemonis: forget about what i'm asking for. nicolas: so, let's get close. lemonis: you wanted me to have skin in the game. but at 10%, i don't really care. stephanie: i was just gonna say that. -lemonis: i don't really care. -nicolas: 25%. lemonis: it ain't even correct at 25%. it ain't gonna happen. are you willing to give your sister equity? nicolas: absolutely. lemonis: does she have equity today? nicolas: no. lemonis: okay, so i'm willing to come off my 50% if i know she has equity. does your mom have equity? nicolas: no. lemonis: i'm willing to come off my 50% if everybody has equity. and so, my final offer -- it is it -- is i'm comfortable with you having the most. no doubt about it. you'll have 40% of it, i'll have 30% of it,
stephanie will have 15%, and the lady that founded the business, your mother, will have 15%. let me be very clear. i'm gonna be 100% in charge. we have a deal? nicolas: i accept this. stephanie: wow. -lemonis: partner. -stephanie: that's right. -that's right. -lemonis: partner. i'm gonna write a check to courage. b for $800,000. we're gonna be partners. and we'll let the fun begin. nicolas: i've never seen a check that big before. stephanie: [ chuckles ] lemonis: you'll be making checks much bigger than this. so, you guys want to get everybody together
and we can tell them what's happening? noemi: let's talk. lemonis: you guys may or may not know why i'm here, but i'm here to make an investment in this business. and i believe in the potential of this business, and so i'm investing $800,000 to be a partner with them. woman: oh, my god! yes! lemonis: i will be a 30% partner. nicolas will have 40%, and stephanie and noemi will each have 15%. everybody's gonna have very defined roles, but noemi will not be controlling design. noemi: okay. got it. lemonis: i actually think that the foundation for the business is sound. people, process, and product -- my three principles. the people are awesome, and so that's why i'm standing here today. the process to design merchandise is broken. we are going to re-brand and re-merchandise all of the stores. woman: wow.
[ cheers and applause ] lemonis: and we are gonna install a planogram system. stephanie: i have been saying planograms to nicolas for six years. lemonis: a planogram is a visual merchandising tool used by retailers. it ensures that the product is displayed properly. it also ensures that multiple locations have a consistent look and feel. since courage. b has seven locations, this is the first step in creating consistency across all their stores. we have hundreds of thousands of dollars in mistakes in inventory. we will never make those mistakes again. i think the clothes are affordable. what we won't be doing is selling things that don't have good fit and finish. it's disturbing. what we want to do is improve all of that. my goal is to really improve the fit and finish of all the products. i'm gonna do that by improving the quality of the fabrics and also being more selective about the manufacturers i use -- really raising the standards.
-let's get to work. -woman: okay. woman #2: all right. thank you. -lemonis: hi, guys. -stephanie: hey. lemonis: i thought we could maybe all huddle in the conference room and start looking at those five foundational products. stephanie: great. yeah. lemonis: right now courage. b has way too many products. in order to move this business forward, i have to simplify things. a good example would be pants. we can have different shapes and different sizes, but they're all still pants. let's use this space -- nicolas: for merchandise? -lemonis: yeah. -nicolas: okay. lemonis: i want to go through all the products that we have today and see if any of these existing products will contribute to one of the five pillars. i want everybody to pick what they think is a foundational item. stephanie: i look through this, and i'm just like -- i don't understand how we made any money. lemonis: honestly, for me, the dresses and the tops are the ones that need the most work. you want to have a 35-year-old buyer? really? you look at these tops, you wouldn't wear this stuff.
noemi: absolutely not. and i don't. lemonis: and that should be your first signal that there's a problem. we've lost our way here, and we're bringing in a designer to fix them 'cause i don't like where we're sitting today, and i don't think you guys do, either. courage. b has a terrible identity crisis. they don't know who they're selling to. in order for this brand to be relevant, it has to be more youthful and more innovative and more comfortable. you look at this duster, the quality of it's terrible. -noemi. -noemi: yeah. lemonis: this is your responsibility. the quality is your responsibility. we're gonna make sure that the fabric doesn't rip. and we're gonna add some things to it so we can make a whole collection out of it. we're gonna have five pillars. pillar number one's gonna be this duster. it's a great money-maker for us, and so let's get it made right. we're gonna have dresses. they're gonna be classic and simple. we're gonna have tops that are gonna be clean-cut that are more flattering. and the pants -- we got to have more variety and we got to be a little bit more on the strike zone. bags -- we basically just knocked off everybody else's bags.
what most important thing do you want to be known for? stephanie: i fight for the fiji. i'm sorry. woman: the old design was the winner. lemonis: so, why did you change the design if she says it's a winner? nicolas: because it was falling apart. stephanie: i'll tell you what happened. nicolas: wait one second. we tried different factories, different patterns, and this is the one that -- noemi: i never approved this design. stephanie: yes, you did. you made this design. noemi: no, no, no. it was so quick. -i'm sorry. -nicolas: you approved this. stephanie: are you kidding? you made that. nicolas: don't even. -don't even. -noemi: okay. you went too quick with that. i'm sorry. nicolas: excuse me. stop it. noemi: i blink, and somebody approve it. -i'm saying the truth. -stephanie: no, you're not. noemi: i designed the other one. nicolas: enough with your ego already. enough! lemonis: we're gonna literally take all this stuff out, so if we're gonna get started -- stephanie: wait, what? hold on. nicolas: what do you mean? lemonis: we're gonna be closed for a period of time -- -probably for about a month. -nicolas: what?!
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noemi has talent, and she's made some beautiful pieces. but there's been more mistakes than there have been winners. but nicolas is ultimately in charge of the business, so i'm not interested in them playing the blame game anymore. what i'm interested in is getting these five pillars established and getting these products selected. and if they're gonna waste time swirling around with a bunch of nonsense, i'm gonna pick the products. this will end up becoming our signature product. stephanie: messenger. lemonis: what i want to task you with is going back to the drawing board on this product. nicolas: yep. lemonis: and i want to see five to six variations of things with this. i want to see a diaper bag, i want to see a duffel bag, and i want to see a computer bag, a computer cover like this. courage. b will now focus its business on five key items -- dusters, tops, pants, dresses, and bags. going forward, if it's not in one of those categories, it won't be on the shelf. this is gonna end up being a name change, as well. this is gonna be called "the courage bag."
-stephanie: love it. -woman: oh, my god. lemonis: our store's gonna be badass. today, i'm headed back to greenwich to rethink and re-lay out the way this store is merchandised. i just look around, and i feel like i'm in a flea market. once i get that figured out, this will now become the blueprint for all the existing stores and any new store going forward. we're gonna literally take all this stuff out, so i'm gonna -- -we're gonna get started -- -stephanie: wait, what? nicolas: what do you mean? lemonis: we're gonna be closed for a period of time -- probably for about a month. -nicolas: what?! -stephanie: hold on. what's gonna happen with this merchandise? lemonis: we're gonna liquidate it. designing and buying products for the five pillars is gonna be expensive. in order for us to do that, i need to liquidate the existing bad inventory that we have so that i can take that cash and reinvest it in new inventory that sells. stephanie: sorry. get right in there. noemi is still the face of the brand, and it's still her eye that i trust.
but in order to make sure that she's successful, i'm gonna hire legitimate designers with legitimate track records. lynn: make one version striped and make another version solid. lemonis: lynne hiriak, who's worked with great designers such as michael kors and derek lam, is gonna work directly with noemi to help courage. b establish a real retail-brand identity. now that we've ensured that our designs are gonna be taken care of by an experienced designer, it's now time to fix the quality. woman: hi. how are you? lemonis: going forward, we will only be sourcing the finest fabrics for our collection. feel this. noemi: oh, my god. lemonis: this fabric is a higher-grade fabric than we have today. noemi: yes. lemonis: we charge $99 today for a product that, labor and material, costs us about $11. noemi: mm-hmm. lemonis: if we go to $22 or even $25 -- lemonis: in order to increase the margins in this business, we have to increase the quality of the product.
today, the duster is made for $11 and sold for $99. i believe that if we dramatically change the fabric and the stitching, all the fit and finish that goes along with it, we'll be able to charge $145. the new cost will probably be around $25. that gives us a net gain of $32. we're gonna be instilling this philosophy across all the products and all the pillars. i'm confident that courage. b is now heading in the right direction. hey, guys. stephanie: hey. good morning, marcus. lemonis: what's happening? nicolas: i made a new version of the duster with the different type of trim. lemonis: okay. nicolas: you talked about the trim was fraying. -lemonis: can i see it? -nicolas: yeah. let me get it. lemonis: noemi, can you come on down? nicolas: the weaving is a little tighter, so it feels slightly different. lemonis: who's the one that actually changed this?
nicolas: i did. lemonis: nicolas, why are you working on the duster? nicolas: because i had the resources to do it. lemonis: but you didn't include your mom? noemi: no, because we went through that. lemonis: it sounds like you have a problem with that. nicolas: i don't have a problem with that. noemi: it's the control. i told you. this is another problem we have. nicolas: so, are we talking about the past or the future or -- i don't understand. noemi: future. -nicolas: okay, so -- -noemi: we already decide. why are we going back and talking about it? nicolas: so, if we're talking about the future, what happened in the past is irrelevant. lemonis: nicolas, i told you to work on the bag, not this. it looks exactly the same and it feels the same. so you wasted time. i specifically tasked noemi with improving the duster line. i wanted her to upgrade the fabric, and i wanted her to upgrade the finish. but what baffled me is that nicolas decided to take charge and do this on his own. so many companies fail when people do jobs that they're not supposed to do. going forward, i want her to deal with this kind of stuff. nicolas: okay.
lemonis: i don't really understand why nicolas has so much animosity towards his mother, but i need to understand it because, ultimately, it's gonna determine if courage. b succeeds or not. i'm struggling with how nicolas talks to you. noemi: he's a good person. but sometimes, he doesn't know the limit. lemonis: how does it make you feel when you fight? noemi: bad. bad. nicolas: you don't change that. we will tell you whether it is financially and logistically feasible to do. lemonis: i need to kind of understand what i just walked into. if your business is in trouble and you need my help, log on to...
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noemi: no. he cannot. lemonis: i know i can fix many of the business problems that exist at courage. b, but if noemi and nicolas don't work through their issues, it's gonna undermine the success of this business. i've hired professional visual merchandisers to come in and assist in the renovations. woman: this is 128 inches. lemonis: our goal is to create a new and inviting showroom to highlight and feature our new courage. b line. we're gonna need to totally transform this store. we're adding new shelving, recessed lighting, and hip chandeliers to boost the upscale vibe. woman: the mirrors are going here. lemonis: we're opening up the floor plan to increase the visibility of merchandise and increase the customer flow. the purpose of redoing the floor plan at courage. b is not only to increase sales per square foot, but it's also to have a cleaner presentation for the customer. i want them to walk in and see the five pillars that we've created. i don't want to have a cluttered mess like we had before. fixing the floor plan and fixing the merchandising is the first step.
second step is fixing the product. and we're also renovating the manhattan location. the biggest change is gonna be taking the fopp's sign down and putting the courage. b sign up. now for the merchandise. i want to see some of the samples. i'm excited to see the new product, but i know what i want when it comes to quality, and i'm not gonna accept anything less. the fit and finish has to be right. look at the quality. you guys got this one right. you're 80% of the way there. by making these changes, it's gonna really upgrade the new courage. b brand. i want all this stuff ready for the re-launch. it's got to be ready. noemi: we discussed how to do the duffel bag, you know? nicolas: you weren't -- you weren't part of that conversation. noemi: yes, i was. i was there. nicolas: i know, but this isn't your job. you were never asked to do this. this isn't your job.
noemi: i did this bag. nicolas: you came up with the original idea. thank you very much. and now the rest, you're off. noemi: yeah, but do the rest, i'm sorry. nicolas: no, ycan't do the rest. you don't know how to finish anything. it's either a hobby, a game, or it's a business. noemi: it's business. nicolas: i'll give you a little bit about business. you have your job to do. your job is to come up with an idea, and then it is your job to advise, so when the product comes in, we will tell you whether it is financially and logistically feasible to do. stephanie: can you stop? nicolas, please. -noemi: i'm sorry. -nicolas: no. no, no, no. you're not liable. there's absolutely no ownership to your actions. stephanie: please. noemi: i cannot take it anymore. lemonis: i need to kind of understand... what i just walked into. you guys truly have real love for each other, except when you get in here it gets a little toxic. noemi: he's raising his voice, and he's upset. and i don't know what to do when he's like that.
nicolas: so, this is my fault. i'm not a good son. i don't take care of you. stephanie: she never said that. i haven't taken bullet after bullet for you. this is ridiculous. -stephanie: nobody said that. -nicolas: i am your son. i have sacrificed life and limb for you, and i'm not doing any of this -- noemi: i did it in the past for you, nicolas. nicolas: and we started this business with debt that we've just gotten ourselves out of, okay, that your children have been carrying. you want all of the accolade without doing any of the work. stephanie: she also went through a tough time in the last couple years. nicolas: yeah. we all did. i understand that. stephanie: okay, so we have to have a little bit of understanding for each other. nicolas: okay, well, tell that to the bank, tell that to the landlords, tell that to the people that call me for bills. tell that to all them. stephanie: nicolas. i don't want him to walk out that door because of this. please stop. please. i'm begging you.
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nicolas: you want all of the accolade without doing any of the work. stephanie: nicolas, she also went through a tough time in the last couple years. nicolas: yeah. we all did. stephanie: i don't want him to walk out that door because of this. please stop. please. i'm begging you. please. lemonis: i'm there to help fix the business. i'm not a therapist. and candidly, i'm embarrassed that he thinks it's okay to talk to his mother this way. and if i can't understand why he feels this way, i'm not sure that i can respect him in business. nicolas: this is a woman that was able to do anything. like, she could move mountains. lemonis: so, where it gets very blurry for me is when you walk in that door you are her boss. but you also would never talk to an employee that way. so why do you? nicolas: i think my sadness is manifesting itself in anger. it's just sadness i've been carrying my whole life.
lemonis: about your dad? nicolas: [ voice breaking ] yeah. i don't think i ever truly, like, just, like, dealt with it, you know? i was 8. i was 8 years old. we'd just moved to the u.s. and i heard something fall, and i got up and the first thing i saw was my mother on top of him trying to wake him up. he was dying. she was saying in french, like, "patrick, wake up. patrick, wake up." and i was watching all this happen. i didn't speak any english. and i still managed to call 911 and say, "my father's dying. please send an ambulance." then when i hung up the phone, i saw my 5-year-old sister, and she looked at me, she goes, "what's going on?" and i said, "everything's gonna be okay." and i grabbed her, we went into our room and i took out games.
she goes, "what's going on with dad?" i go, "nothing. let's just play." and i put her to bed, and... and then i woke up the next morning and i saw my mother on the couch, and she said, "your father died last night." and i looked at her, and i said, "i think stephanie and i need to go to school." i was 8 years old. that's what i remember. this is another piece of that puzzle. lemonis: what is? nicolas: our relationship. i mean, she is everything -- mom, dad, friend, partner. -lemonis: employee. [ chuckles ] -nicolas: employee. lemonis: discipline her to be creative, but be constructive. and be encouraging and be supportive. she's your mom first. nicolas: yeah. lemonis: and she's your employee last. don't ever forget that she's your mom first, or she will smack you upside your head. nicolas: maybe she should more often. lemonis: yeah. the fact that nicolas was able to open up and be vulnerable and express his feelings with me,
i gained a lot of respect for him in that moment. look, i know that you've been wearing the weight of the world on your shoulders, and your mother and your sister are grateful. i'm grateful because you got us to this point. but you got to let it go. you got to let it go. she knows she made mistakes. you made mistakes. she made mistakes. i've made more mistakes than all of you combined. nicolas: [ sniffles ] revolutionizing an industry can be a tough act to follow,
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and a lot of transformation has happened. the product's been totally redone, and most of the stores have been renovated. i'm taking them to greenwich tonight so they can see the first one. don't peek. stephanie: yeah, right. lemonis: welcome to your new store. nicolas: [ chuckles ] stephanie: it looks so different. nicolas: oh, my god. lemonis: greenwich feels like a brand-new business. doesn't feel tired and dark. it feels bright, it feels open and airy. my investment feels really good right now. stephanie: this is so cool. noemi: i love that. -i love that. -nicolas: this is awesome. stephanie: oh, my goodness, that chandelier. wow. lemonis: do you now understand why the product also had to be different? noemi: oh, definitely. stephanie: i mean, i'm blown away. it looks like a brand. nicolas: look at all the --
the colors came together and the whole thing. it's like a story. wow. lemonis: my goal at the beginning of courage. b was to transform the brand into something new, youthful, fresh, and fun. the store looks different. what i love the most is i love the merchandising. i feel like the customer can easily understand what's happening in the store, and it's not filled with a bunch of merchandise that doesn't fit in the pillars. noemi: thank you so much. nicolas: marcus, it looks great. lemonis: i think the thing, guys, that maybe is the best is that the relationship of all of you has transformed. noemi: oh, i love my children. nicolas: yeah. noemi: oh, my god. thank you. lemonis: let's get ready for opening tomorrow. -noemi: [ gasps ] wow. -lemonis: okay. -nicolas: do it. -noemi: wow. lemonis: all right, guys. noemi: thank you. lemonis: today's the grand opening for greenwich -- the primary location that we renovated
that will be the blueprint for all courage. b's going forward. stephanie: that's a nice one. it's a little more, like, business conservative. lemonis: how busy it is. nicolas: yeah. noemi: i love it. the color. woman: i love this. woman #2: and guess what. this -- you can put it in the wash. woman: shut up. lemonis: the new courage. b brand, for me, is fresh, it's youthful. customers seem excited. woman: oh, my god, i love this top. lemonis: and it's got much better margins. woman: this is amazing. so high-end. everything that i've tried on fits to the "t." lemonis: there was a lot of work that went into transforming the product. when a customer picks up a garment, they want to know that they're getting their money's worth. you know what i think i'm happiest about? the fit and finish. -after many long days. -noemi: yes. lemonis: i like the fact that you're listening and realizing that quality will drive value.
woman: did you see this? woman #2: no, i didn't. stephanie: there you go. enjoy everything. -woman: thank you. -stephanie: okay. $103.69. thank you. lemonis: you know, sometimes i say that people can't be changed, but in this case, i feel like the people transformed, as well. i'm honored that you guys let me come in and change things as much as i did. noemi: thank you for that. lemonis: and that you've accepted me into your group. you guys are a dangerous trio. i'm just trying to keep up with you guys. [ cork pops ] stephanie: whoo! lemonis: if i can get the rest of the new courage. b stores to open just like this one, we're gonna make a lot of money. nicolas, the numbers every day, the margins every day, i want to hear about them. noemi: we got it. thank you so much. lemonis: okay, guys. nicolas: love you guys. awesome. courage. b.
>> tonight on the profit... good morning, i'm marcus. >> nice to meet you. >> i go inside planet popcorn, a multimillion-dollar popcorn business with a huge disney contract. the problem is they don't have any real profits to show for it. you guys are in trouble. the balance sheet is hundreds of thousands of dollars wrong. mismanagement and sloppy accounting have forced the owner to ask her mother to take out a second mortgage on her home just to keep the doors open. obviously, you used the petty cash to buy lottery tickets. >> i did. >> the product is great, and if i can get sharla to listen long enough, i'll turn this unfocused organization into a national brand. my name is marcus lemonis, and i fix failing businesses. if you think that i can launch you in a direction to make you a profit, then you should do a deal with me.